Nov 02 2010

Nevermind on the financial planner guy

Shane created a quick Excel spreadsheet the other day and we looked more at how fees would affect our IRA and college investments.

The ELP planner charged a fee upfront (called a load or something like that) of 5.65%. So for every dollar we invest, a fee comes off that amount. Kind of yuck, if you ask me.

We then looked at the fees Vanguard charges, and I contacted the company for further clarification of how the fees work. They take .23% off the top of your account, so that fee does take away from your entire account balance — no matter if you had a gain or a loss.

Still, assuming an identically performing fund, we’d come out ahead if we did it ourselves with Vanguard.

So that’s what we’re gunna do.

P.S., this isn’t a one-size-fits-all solution. Do what’s best for you of course.



4 Responses to “Nevermind on the financial planner guy”

  1. That’s a ridiculous up front load! I wonder how much Dave Ramsey gets for his endorsement….

  2. Yeah, I wonder!

    I do know that for funds with upfront costs like that, that’s a typical rate. Which I think is nuts.

  3. One time I went to a supposedly “independent” financial planner just to make sure all my ducks were in a row before buyin a house. Sadly, that was the first thing he tried to do — get me to buy whatever he was selling at a very expensive up front cost. (Plus I paid $200 to see this guy that PROMISED he wasn’t in it for the commission; I only went to him because he was the instructor for and investment class I took in college)

    The whole experience was very disillisiouning and I’ve never gone to a FP again. There is enough education to be had online, plus using good old fashioned commen sense and biblical widsom in handling money we can all do quite well without paying somebody to tell us to give them a fat paycheck.
    Trixie´s last post ..Menu Plan Monday

  4. I used Vanguard to set up a Roth IRA. They were very helpful and their site is easy to use. And they came recommended to me from someone who specializes in retirement plans.
    anne´s last post ..Weekend Update – Fall is Fun part II

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

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